• EUR/USD rebounds and returns to near 1.0500 as the US Dollar resumes its corrective trend triggered after Trump nominated Bessent for US Treasury Secretary.
• ECB policymakers support reducing interest rates gradually to abate risks of inflation becoming persistent.
• This week, investors will focus on US PCE inflation for October and Eurozone flash HICP data for November.

EUR/USD recovers intraday losses and rebounds to near the psychological resistance of 1.0500 in Tuesday’s European session. The major currency pair bounces back after a weak opening as the US Dollar (USD) surrenders most of its daily gains.

The US Dollar Index (DXY), which gauges the Greenback’s value against six major currencies, started strongly and raised to near 107.50 in the early Asian session but surrenders most of its gains and falls to near 107.00 during the European trading hours.

Renewed fears boosted the US Dollar’s (USD) appeal in Tuesday’s Asian session after President-elect Donald Trump threatened to raise tariffs on other North American economies from where he expects China to have poured illicit drugs into the United States (US). Trump said he would impose 25% tariffs on Mexico and Canada and an additional 10% on China to the 60% already mentioned in his election campaign.

The US Dollar resumes its corrective trend, which started on Monday after Trump nominated seasoned hedge fund manager Scott Bessent for the role of Treasury Secretary. The USD fell sharply as investors anticipated Bessent to fulfill the economic agenda by maintaining fiscal discipline and political steadiness.